The Medicare Part D prescription drug benefit dramatically changed how prescription drugs are financed and administered in nursing homes, particularly for the two-thirds of residents who are dually eligible for Medicare and Medicaid ("dual eligibles"). While Medicaid formerly covered drugs for dual-eligible nursing home residents, these individuals are now randomly assigned to private prescription drug plans (PDP). PDPs vary with respect to formulary coverage and utilization management techniques for specific medications. As a result, some dual-eligible nursing home residents are randomized to PDPs with generous coverage of their current medications and others to PDPs with more restrictive coverage. There have been no empirical studies of the impact of PDP generosity on the health and well-being of dual-eligible nursing home residents. To assess the impact of PDP generosity on medication use and resident health outcomes, we propose to use drug utilization data from a large long term care pharmacy in combination with data on health outcomes from the Minimum Data Set (MDS) and Medicare Part A hospitalization claims for the period 2005-2008 (one year before and three years after Part D implementation). The specific aims of this application are to: 1) construct medication-specific measures of the generosity of coverage for each PDP to which a dual-eligible nursing home resident was randomly assigned;2) examine the impact of PDP generosity on medication changes and discontinuations;3) examine the impact of PDP generosity on health outcomes;and 4) assess the impact of medication changes and discontinuations on health outcomes. Aims 2 and 3 take advantage of the randomization of dual eligibles to PDPs to estimate effects of generosity on medication use and outcomes that are uncontaminated by selection bias. To determine if medication disruptions are a mechanism through which PDP generosity affects health outcomes, Aim 4 uses the random assignment to PDPs as an instrumental variable in a structural model estimating the effect of medication changes and discontinuations on health outcomes. We will examine seven classes of medications for which physicians, nursing home administrators, and long term care pharmacies have reported coverage restrictions for some PDPs: osteoporosis medications, angiotensin receptor blockers (ARBs), atypical antipsychotics, antidepressants, cholinesterase inhibitors, long-acting opioids, and nebulized inhalants. We will study health outcomes that could be related to disruptions in use of these medications, including fractures, hospitalization for cardiac complications, hallucinations or delusions, behavior, depressive symptoms, cognitive performance, functional status, and pain. We will estimate a combination of trinomial regression models, logistic regression models, linear regression models, and two-stage least squares regression models to address these aims. PUBLIC HEALTH RELEVANCE: Under Medicare Part D, elderly dual-eligible nursing home residents -- a population with great medical need and limited financial resources -- are randomly assigned to a PDP without consideration of its coverage of their current medications. Our study will provide the first comprehensive assessment of the impact of PDP coverage generosity on medication use and health outcomes for dual-eligible nursing home residents. The results of this study will be useful to federal and state policymakers in assessing possible changes to Part D and to other key stakeholders responsible for resident care, such as nursing home administrators, physicians who care for nursing home residents, and long term care pharmacies.